The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees, suppliers, local communities, creditors, and others. It addresses morals and values in managing an organization, such as those related to corporate social responsibility , market economy , and social contract theory .
76-524: The stakeholder view of strategy integrates a resource-based view and a market-based view, and adds a socio-political level. One common version of stakeholder theory seeks to define the specific stakeholders of a company (the normative theory of stakeholder identification ) and then examine the conditions under which managers treat these parties as stakeholders (the descriptive theory of stakeholder salience ). In fields such as law, management, and human resources, stakeholder theory succeeded in challenging
152-401: A holistic approach to the study of ecological systems , especially ecosystems ; it can be seen as an application of general systems theory to ecology. Central to the systems ecology approach is the idea that an ecosystem is a complex system exhibiting emergent properties . Systems ecology focuses on interactions and transactions within and between biological and ecological systems, and
228-409: A 'social contract' to the corporation, undermines the principles on which a market economy is based, and could thereby increase the opportunities of weak stakeholder exploitation by self-interested managers rather than to decrease them. Resource-based view The resource-based view ( RBV ), often referred to as the "resource-based view of the firm", is a managerial framework used to determine
304-1699: A company, based on their core values and beliefs. The steps to a values-based view of strategy are: The main reason for these alternate steps to view strategy is to provide a method that concentrates on the values of management practices, rather than simply resourced-based strategy. A number of criticisms of RBV have been widely cited, and are as follows: Other criticisms include: Systems theory Collective intelligence Collective action Self-organized criticality Herd mentality Phase transition Agent-based modelling Synchronization Ant colony optimization Particle swarm optimization Swarm behaviour Social network analysis Small-world networks Centrality Motifs Graph theory Scaling Robustness Systems biology Dynamic networks Evolutionary computation Genetic algorithms Genetic programming Artificial life Machine learning Evolutionary developmental biology Artificial intelligence Evolutionary robotics Reaction–diffusion systems Partial differential equations Dissipative structures Percolation Cellular automata Spatial ecology Self-replication Conversation theory Entropy Feedback Goal-oriented Homeostasis Information theory Operationalization Second-order cybernetics Self-reference System dynamics Systems science Systems thinking Sensemaking Variety Ordinary differential equations Phase space Attractors Population dynamics Chaos Multistability Bifurcation Rational choice theory Bounded rationality Systems theory
380-461: A comparative advantage in resources can lead to a competitive advantage in market position. In the resource-based view, strategists select the strategy or competitive position that best exploits the internal resources and capabilities relative to external opportunities. Given that strategic resources represent a complex network of inter-related assets and capabilities, organisations can adopt many possible competitive positions. Although scholars debate
456-414: A competitive edge. A key insight arising from the resource-based view is that not all resources are of equal importance, nor do they possess the potential to become a source of sustainable competitive advantage. The sustainability of any competitive advantage depends on the extent to which resources can be imitated or substituted. Barney and others point out that understanding the causal relationship between
532-430: A computer program is passive when it is a file stored on the hardrive and active when it runs in memory. The field is related to systems thinking , machine logic, and systems engineering . Systems theory is manifest in the work of practitioners in many disciplines, for example the works of physician Alexander Bogdanov , biologist Ludwig von Bertalanffy , linguist Béla H. Bánáthy , and sociologist Talcott Parsons ; in
608-400: A firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness" Capabilities are "a special type of resource, specifically an organizationally embedded non-transferable firm-specific resource whose purpose is to improve the productivity of the other resources possessed by the firm." Barney defined a competitive advantage as "when [a firm]
684-404: A foundational reference for researchers in the field, having been cited over 1,100 times. Mitchell, et al. derive a typology of stakeholders based on the attributes of power (the extent a party has means to impose its will in a relationship), legitimacy (socially accepted and expected structures or behaviors), and urgency (time sensitivity or criticality of the stakeholder's claims). By examining
760-473: A general systems theory that could explain all systems in all fields of science. " General systems theory " (GST; German : allgemeine Systemlehre ) was coined in the 1940s by Ludwig von Bertalanffy , who sought a new approach to the study of living systems . Bertalanffy developed the theory via lectures beginning in 1937 and then via publications beginning in 1946. According to Mike C. Jackson (2000), Bertalanffy promoted an embryonic form of GST as early as
836-1137: A general theory of systems "should be an important regulative device in science," to guard against superficial analogies that "are useless in science and harmful in their practical consequences." Others remain closer to the direct systems concepts developed by the original systems theorists. For example, Ilya Prigogine , of the Center for Complex Quantum Systems at the University of Texas , has studied emergent properties , suggesting that they offer analogues for living systems . The distinction of autopoiesis as made by Humberto Maturana and Francisco Varela represent further developments in this field. Important names in contemporary systems science include Russell Ackoff , Ruzena Bajcsy , Béla H. Bánáthy , Gregory Bateson , Anthony Stafford Beer , Peter Checkland , Barbara Grosz , Brian Wilson , Robert L. Flood , Allenna Leonard , Radhika Nagpal , Fritjof Capra , Warren McCulloch , Kathleen Carley , Michael C. Jackson , Katia Sycara , and Edgar Morin among others. With
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#1732773190834912-465: A holistic way. Such criticisms would have lost their point had it been recognized that von Bertalanffy's general system theory is a perspective or paradigm, and that such basic conceptual frameworks play a key role in the development of exact scientific theory. .. Allgemeine Systemtheorie is not directly consistent with an interpretation often put on 'general system theory,' to wit, that it is a (scientific) "theory of general systems." To criticize it as such
988-465: A moral obligation) and derivatively legitimate stakeholders (those whose stakeholder status is derived from their ability to affect the organization or its normatively legitimate stakeholders). Stakeholder theory succeeds in becoming famous not only in the business ethics fields; it is used as one of the frameworks in corporate social responsibility methods. For example, ISO 26000 and GRI (Global Reporting Initiative) involve stakeholder analysis. In
1064-517: A move from neoliberalism to stakeholder capitalism, "which implies a different role for the state as well as a focus on creating more cohesive and resilient societies", could affect public optimism in the Czech Republic. The political philosopher Charles Blattberg has criticized stakeholder theory for assuming that the interests of the various stakeholders can be, at best, compromised or balanced against each other. Blattberg argues that this
1140-403: A new human computer interaction (HCI) information system . Overlooking this and developing software without insights input from the future users (mediated by user experience designers) is a serious design flaw that can lead to complete failure of information systems, increased stress and mental illness for users of information systems leading to increased costs and a huge waste of resources. It
1216-479: A specific firm. An anticipation of such concepts, as part of Corporate Social Responsibility, appears in a publication that appeared in 1968 by the Italian economist Giancarlo Pallavicini, creator of "the decomposition method of the parameters" to calculate the results are not directly economic activity of enterprise, regarding ethical issues, moral, social, cultural and environmental. More recent scholarly works on
1292-424: A stakeholder in the context of higher education as anyone with a legitimate interest in education who thereby acquires a right to intervene. Studies of higher education first began to recognize students as stakeholders in 1975. External stakeholders may include employers. In Europe, the rise of stakeholder regimes has arisen from the shift of higher education from a government-run bureaucracy to modern systems in which
1368-441: A system may affect other components or the whole system. It may be possible to predict these changes in patterns of behavior. For systems that learn and adapt, the growth and the degree of adaptation depend upon how well the system is engaged with its environment and other contexts influencing its organization. Some systems support other systems, maintaining the other system to prevent failure. The goals of systems theory are to model
1444-776: A system's dynamics, constraints , conditions, and relations; and to elucidate principles (such as purpose, measure, methods, tools) that can be discerned and applied to other systems at every level of nesting, and in a wide range of fields for achieving optimized equifinality . General systems theory is about developing broadly applicable concepts and principles, as opposed to concepts and principles specific to one domain of knowledge. It distinguishes dynamic or active systems from static or passive systems. Active systems are activity structures or components that interact in behaviours and processes or interrelate through formal contextual boundary conditions (attractors). Passive systems are structures and components that are being processed. For example,
1520-532: A systems and developmentally oriented organizational psychology ," some theorists recognize that organizations have complex social systems; separating the parts from the whole reduces the overall effectiveness of organizations. This difference, from conventional models that center on individuals, structures, departments and units, separates in part from the whole, instead of recognizing the interdependence between groups of individuals, structures and processes that enable an organization to function. László explains that
1596-413: A team effort, forming a structured development process that proceeds from concept to production to operation and disposal. Systems engineering considers both the business and the technical needs of all customers, with the goal of providing a quality product that meets the user's needs. Systems thinking is a crucial part of user-centered design processes and is necessary to understand the whole impact of
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#17327731908341672-687: A way which they think conducive to the best interests of the community as a whole. The term "stakeholder" in its current use first appeared in an internal memorandum at the Stanford Research Institute in 1963. Subsequently, a "plethora" of stakeholder definitions and theories were developed. In 1971, Hein Kroos and Klaus Schwab published a German booklet Moderne Unternehmensführung im Maschinenbau ( Modern Enterprise Management in Mechanical Engineering ) arguing that
1748-468: A whole. In fact, Bertalanffy's organismic psychology paralleled the learning theory of Jean Piaget . Some consider interdisciplinary perspectives critical in breaking away from industrial age models and thinking, wherein history represents history and math represents math, while the arts and sciences specialization remain separate and many treat teaching as behaviorist conditioning. The contemporary work of Peter Senge provides detailed discussion of
1824-430: Is a branch of psychology that studies human behaviour and experience in complex systems . It received inspiration from systems theory and systems thinking, as well as the basics of theoretical work from Roger Barker , Gregory Bateson , Humberto Maturana and others. It makes an approach in psychology in which groups and individuals receive consideration as systems in homeostasis . Systems psychology "includes
1900-443: Is a movement that draws on several trends in bioscience research. Proponents describe systems biology as a biology-based interdisciplinary study field that focuses on complex interactions in biological systems , claiming that it uses a new perspective ( holism instead of reduction ). Particularly from the year 2000 onwards, the biosciences use the term widely and in a variety of contexts. An often stated ambition of systems biology
1976-423: Is a product of its emphasis on negotiation as the chief mode of dialogue for dealing with conflicts between stakeholder interests. He recommends conversation instead and this leads him to defend what he calls a 'patriotic' conception of the corporation as an alternative to that associated with stakeholder theory. Management scholar Samuel F. Mansell argued that stakeholder theory, by applying the political concept of
2052-427: Is a world-view that is based on the discipline of SYSTEM INQUIRY. Central to systems inquiry is the concept of SYSTEM. In the most general sense, system means a configuration of parts connected and joined together by a web of relationships. The Primer Group defines system as a family of relationships among the members acting as a whole. Von Bertalanffy defined system as "elements in standing relationship." Systems biology
2128-476: Is able to implement a value creating strategy not simultaneously being implemented by any current or potential competitors." Firm-based resources may be tangible or intangible. Resources and capabilities may also be intraorganizational or interorganizational : While RBV scholars have traditionally focused on intraorganizational resources and capabilities, some research points to the importance of interorganizational routines. Routines between organizations and
2204-433: Is also related to the origin of life ( abiogenesis ). Systems engineering is an interdisciplinary approach and means for enabling the realisation and deployment of successful systems . It can be viewed as the application of engineering techniques to the engineering of systems, as well as the application of a systems approach to engineering efforts. Systems engineering integrates other disciplines and specialty groups into
2280-463: Is currently surprisingly uncommon for organizations and governments to investigate the project management decisions leading to serious design flaws and lack of usability. The Institute of Electrical and Electronics Engineers estimates that roughly 15% of the estimated $ 1 trillion used to develop information systems every year is completely wasted and the produced systems are discarded before implementation by entirely preventable mistakes. According to
2356-447: Is especially concerned with the way the functioning of ecosystems can be influenced by human interventions. It uses and extends concepts from thermodynamics and develops other macroscopic descriptions of complex systems. Systems chemistry is the science of studying networks of interacting molecules, to create new functions from a set (or library) of molecules with different hierarchical levels and emergent properties. Systems chemistry
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2432-452: Is much more flexible than Porter's prescriptive approach to strategy formulation. The key managerial tasks are: Given the centrality of resources in terms of conferring competitive advantage, the management and marketing literature carefully defines and classifies resources and capabilities. Barney defines firm resources as: "all assets , capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by
2508-443: Is the transdisciplinary study of systems , i.e. cohesive groups of interrelated, interdependent components that can be natural or artificial . Every system has causal boundaries, is influenced by its context, defined by its structure, function and role, and expressed through its relations with other systems. A system is "more than the sum of its parts" when it expresses synergy or emergent behavior . Changing one component of
2584-431: Is the modelling and discovery of emergent properties which represents properties of a system whose theoretical description requires the only possible useful techniques to fall under the remit of systems biology. It is thought that Ludwig von Bertalanffy may have created the term systems biology in 1928. Subdisciplines of systems biology include: Systems ecology is an interdisciplinary field of ecology that takes
2660-721: Is to shoot at straw men. Von Bertalanffy opened up something much broader and of much greater significance than a single theory (which, as we now know, can always be falsified and has usually an ephemeral existence): he created a new paradigm for the development of theories. Theorie (or Lehre ) "has a much broader meaning in German than the closest English words 'theory' and 'science'," just as Wissenschaft (or 'Science'). These ideas refer to an organized body of knowledge and "any systematically presented set of concepts, whether empirically , axiomatically , or philosophically " represented, while many associate Lehre with theory and science in
2736-419: The philosophy of science , physics , computer science , biology , and engineering , as well as geography , sociology , political science , psychotherapy (especially family systems therapy ), and economics . Systems theory promotes dialogue between autonomous areas of study as well as within systems science itself. In this respect, with the possibility of misinterpretations, von Bertalanffy believed
2812-470: The systems approach into the (rationalist) hard sciences of the 19th century, also known as the energy transformation . Then, the thermodynamics of this century, by Rudolf Clausius , Josiah Gibbs and others, established the system reference model as a formal scientific object. Similar ideas are found in learning theories that developed from the same fundamental concepts, emphasising how understanding results from knowing concepts both in part and as
2888-620: The "principle of who or what really counts. In the traditional view of a company, the shareholder view, only the owners or shareholders of the company are important, and the company has a binding fiduciary duty to put their needs first, to increase value for them. Stakeholder theory instead argues that there are other parties involved, including employees , customers , suppliers , financiers , communities , governmental bodies , political groups , trade associations , and trade unions . Even competitors are sometimes counted as stakeholders – their status being derived from their capacity to affect
2964-455: The 1920s and 1930s, but it was not until the early 1950s that it became more widely known in scientific circles. Jackson also claimed that Bertalanffy's work was informed by Alexander Bogdanov 's three-volume Tectology (1912–1917), providing the conceptual base for GST. A similar position is held by Richard Mattessich (1978) and Fritjof Capra (1996). Despite this, Bertalanffy never even mentioned Bogdanov in his works. The systems view
3040-652: The CHAOS report published in 2018 by the Standish Group , a vast majority of information systems fail or partly fail according to their survey: Pure success is the combination of high customer satisfaction with high return on value to the organization. Related figures for the year 2017 are: successful: 14%, challenged: 67%, failed 19%. System dynamics is an approach to understanding the nonlinear behaviour of complex systems over time using stocks, flows , internal feedback loops , and time delays. Systems psychology
3116-550: The ability to manage interorganizational relationships can improve performance. Such collaboration capabilities are, in particular, supported by contract design capabilities. The resources are divided into two critical assumptions: Firms in possession of a resource, or mix of resources that are rare among competitors, are said to have a comparative advantage. This comparative advantage enables firms to produce marketing offerings that are either (a) perceived as having superior value or (b) can be produced at lower costs. Therefore,
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3192-550: The combination of these attributes in a binary manner, 8 types of stakeholders are derived along with their implications for the organization. Friedman and Miles explore the implications of contentious relationships between stakeholders and organizations by introducing compatible/incompatible interests and necessary/contingent connections as additional attributes with which to examine the configuration of these relationships. Robert Allen Phillips distinguishes between normatively legitimate stakeholders (those to whom an organization holds
3268-696: The commonplace critique of educational systems grounded in conventional assumptions about learning, including the problems with fragmented knowledge and lack of holistic learning from the "machine-age thinking" that became a "model of school separated from daily life." In this way, some systems theorists attempt to provide alternatives to, and evolved ideation from orthodox theories which have grounds in classical assumptions, including individuals such as Max Weber and Émile Durkheim in sociology and Frederick Winslow Taylor in scientific management . The theorists sought holistic methods by developing systems concepts that could integrate with different areas. Some may view
3344-611: The constituent elements in isolation. Béla H. Bánáthy , who argued—along with the founders of the systems society—that "the benefit of humankind" is the purpose of science, has made significant and far-reaching contributions to the area of systems theory. For the Primer Group at the International Society for the System Sciences , Bánáthy defines a perspective that iterates this view: The systems view
3420-593: The contradiction of reductionism in conventional theory (which has as its subject a single part) as simply an example of changing assumptions. The emphasis with systems theory shifts from parts to the organization of parts, recognizing interactions of the parts as not static and constant but dynamic processes. Some questioned the conventional closed systems with the development of open systems perspectives. The shift originated from absolute and universal authoritative principles and knowledge to relative and general conceptual and perceptual knowledge and still remains in
3496-430: The development of a coherent body of literature include Birger Wernerfelt , Jay B. Barney , George S. Day , Gary Hamel , Shelby D. Hunt , G. Hooley and C.K. Prahalad . Achieving a sustainable competitive advantage lies at the heart of much of the literature in strategic management and strategic marketing. The resource-based view offers strategists a means of evaluating potential factors that can be deployed to confer
3572-493: The development of the concept to internal discussion in the Stanford Research Institute. He followed this article with a book Strategic Management: A Stakeholder Approach . This book identifies and models the groups which are stakeholders of a corporation , and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address
3648-407: The discipline throughout the 1980s. In contrast, the resource-based view argued that sustainable competitive advantage derives from developing superior capabilities and resources. Jay Barney 's 1991 article, "Firm Resources and Sustained Competitive Advantage," is seen as pivotal in the emergence of the resource-based view. A number of scholars point out that a fragmentary resource-based perspective
3724-507: The domain of engineering psychology , but in addition seems more concerned with societal systems and with the study of motivational, affective, cognitive and group behavior that holds the name engineering psychology." In systems psychology, characteristics of organizational behaviour (such as individual needs, rewards, expectations , and attributes of the people interacting with the systems ) "considers this process in order to create an effective system." System theory has been applied in
3800-416: The etymology of general systems, though it also does not translate from the German very well; its "closest equivalent" translates to 'teaching', but "sounds dogmatic and off the mark." An adequate overlap in meaning is found within the word " nomothetic ", which can mean "having the capability to posit long-lasting sense." While the idea of a "general systems theory" might have lost many of its root meanings in
3876-673: The feats of engineering with the Egyptian pyramids . Differentiated from Western rationalist traditions of philosophy, C. West Churchman often identified with the I Ching as a systems approach sharing a frame of reference similar to pre-Socratic philosophy and Heraclitus . Ludwig von Bertalanffy traced systems concepts to the philosophy of Gottfried Leibniz and Nicholas of Cusa 's coincidentia oppositorum . While modern systems can seem considerably more complicated, they may embed themselves in history. Figures like James Joule and Sadi Carnot represent an important step to introduce
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#17327731908343952-439: The field as being the foundation of stakeholder theory, although Freeman himself refers to several bodies of literature used in the development of his approach, including strategic management , corporate planning , systems theory , organization theory , and corporate social responsibility . A related field of research examines the concept of stakeholders and stakeholder salience, or the importance of various stakeholder groups to
4028-417: The field of business ethics, Weiss, J.W. (2014) illustrates how stakeholder analysis can be complemented with issues management approaches to examine societal, organizational, and individual dilemmas. Several case studies are offered to illustrated uses of these methods. Stakeholder theory has seen growing uptake in higher education in the late 20th and early 21st centuries. One influential definition defines
4104-434: The field of neuroinformatics and connectionist cognitive science. Attempts are being made in neurocognition to merge connectionist cognitive neuroarchitectures with the approach of system theory and dynamical systems theory . Predecessors Founders Other contributors Systems thinking can date back to antiquity, whether considering the first systems of written communication with Sumerian cuneiform to Maya numerals , or
4180-400: The firm and its stakeholders. The nature of what constitutes a stakeholder is highly contested (Miles, 2012), with hundreds of definitions existing in the academic literature (Miles, 2011). Numerous articles and books written on stakeholder theory generally identify Freeman as the "father of stakeholder theory". Freeman's Strategic Management: A Stakeholder Approach (1984) is widely cited in
4256-562: The firm's internal resources in an effort to identify those assets, capabilities and competencies with the potential to deliver superior competitive advantages. During the 1990s, the resource-based view (also known as the resource-advantage theory ) of the firm became the dominant paradigm in strategic planning. RBV can be seen as a reaction against the positioning school and its somewhat prescriptive approach which focused managerial attention on external considerations, notably industry structure . The so-called positioning school had dominated
4332-469: The foundations of modern organizational theory and management by the late 19th century. Where assumptions in Western science from Plato and Aristotle to Isaac Newton 's Principia (1687) have historically influenced all areas from the hard to social sciences (see, David Easton 's seminal development of the " political system " as an analytical construct), the original systems theorists explored
4408-495: The government's role involves more monitoring than direct control. Economist and university professor Danuše Nerudová , a candidate in the 2023 Czech presidential election , is a proponent of stakeholder capitalism where "questions of sustainability and global politics, as well as the development of domestic societies" will have increased relevance for company and state decision making. Researcher Benjamin Tallis has examined whether
4484-551: The implications of 20th-century advances in terms of systems. Between 1929 and 1951, Robert Maynard Hutchins at the University of Chicago had undertaken efforts to encourage innovation and interdisciplinary research in the social sciences, aided by the Ford Foundation with the university's interdisciplinary Division of the Social Sciences established in 1931. Many early systems theorists aimed at finding
4560-506: The industry." While its exact influence is debated, Edith Penrose's 1959 book The Theory of the Growth of the Firm is held by two scholars of strategy to state many concepts that would later influence the modern, resource-based theory of the firm. The RBV is an interdisciplinary approach that represents a substantial shift in thinking. The resource-based view is interdisciplinary in that it
4636-405: The internal resources and capabilities relative to external opportunities. Given that strategic resources represent a complex network of inter-related assets and capabilities, organisations can adopt many possible competitive positions. Although scholars debate the precise categories of competitive positions that are used, there is general agreement, within the literature, that the resource-based view
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#17327731908344712-438: The literature presents many different ideas around the concept of the resource-advantage perspective, at its heart, the common theme is that the firm's resources are financial, legal, human, organisational, informational and relational; resources are heterogeneous and imperfectly mobile and that management's key task is to understand and organise resources for sustainable competitive advantage. Key theorists who have contributed to
4788-689: The management of a modern enterprise must serve not only shareholders but all stakeholders (die Interessenten) to achieve long-term growth and prosperity. This claim is disputed. U.S. authors followed; for example, in 1983, Ian Mitroff published "Stakeholders of the Organizational Mind" in San Francisco. R. Edward Freeman had an article on Stakeholder theory in the California Management Review in early 1983, but makes no reference to Mitroff's work, attributing
4864-486: The modern foundations for a general theory of systems following World War I, Ervin László , in the preface for Bertalanffy's book, Perspectives on General System Theory , points out that the translation of "general system theory" from German into English has "wrought a certain amount of havoc": It (General System Theory) was criticized as pseudoscience and said to be nothing more than an admonishment to attend to things in
4940-474: The new systems view of organized complexity went "one step beyond the Newtonian view of organized simplicity" which reduced the parts from the whole, or understood the whole without relation to the parts. The relationship between organisations and their environments can be seen as the foremost source of complexity and interdependence. In most cases, the whole has properties that cannot be known from analysis of
5016-453: The precise categories of competitive positions that are used, there is general agreement, within the literature, that the resource-based view is much more flexible than Porter's prescriptive approach to strategy formulation. Hooley et al. suggest the following classification of competitive positions: In addition to the resource-based views, value-based views provide an additional way to create organizational management links between employees at
5092-421: The rejection of a shareholder's legal right to a dividend , Australian chief justice Samuel Griffith observed that: The law does not require the members of a company to divest themselves, in its management, of all altruistic motives, or to maintain the character of the company as a soulless and bowelless thing, or to exact the last farthing in its commercial dealings, or forbid them to carry on its operations in
5168-441: The sources of advantage and successful strategies can be very difficult in practice. Thus, a great deal of managerial effort must be invested in identifying, understanding and classifying core competencies. In addition, management must invest in organisational learning to develop, nurture and maintain key resources and competencies. In the resource-based view, strategists select the strategy or competitive position that best exploits
5244-581: The strategic resources a firm can exploit to achieve sustainable competitive advantage. Barney's 1991 article "Firm Resources and Sustained Competitive Advantage" is widely cited as a pivotal work in the emergence of the resource-based view. However, some scholars argue that there was evidence for a fragmentary resource-based theory from the 1930s. RBV proposes that firms are heterogeneous because they possess heterogeneous resources, meaning that firms can adopt differing strategies because they have different resource mixes. The RBV focuses managerial attention on
5320-555: The study of ecological systems by Howard T. Odum , Eugene Odum ; in Fritjof Capra 's study of organizational theory ; in the study of management by Peter Senge ; in interdisciplinary areas such as human resource development in the works of Richard A. Swanson ; and in the works of educators Debora Hammond and Alfonso Montuori. As a transdisciplinary , interdisciplinary, and multiperspectival endeavor, systems theory brings together principles and concepts from ontology ,
5396-424: The topic of stakeholder theory that exemplify research and theorizing in this area include Donaldson and Preston (1995), Mitchell, Agle, and Wood (1997), Friedman and Miles (2002), and Phillips (2003). Thomas Donaldson and Lee E. Preston argue that the theory has three distinct but mutually supportive aspects, descriptive, instrumental, and normative: Since the publication of this article in 1995, it has served as
5472-402: The tradition of theorists that sought to provide means to organize human life. In other words, theorists rethought the preceding history of ideas ; they did not lose them. Mechanistic thinking was particularly critiqued, especially the industrial-age mechanistic metaphor for the mind from interpretations of Newtonian mechanics by Enlightenment philosophers and later psychologists that laid
5548-452: The translation, by defining a new way of thinking about science and scientific paradigms , systems theory became a widespread term used for instance to describe the interdependence of relationships created in organizations . A system in this frame of reference can contain regularly interacting or interrelating groups of activities. For example, in noting the influence in the evolution of "an individually oriented industrial psychology [into]
5624-459: The usual analysis frameworks, by suggesting that stakeholders' needs should be put at the beginning of any action. Some authors, such as Geoffroy Murat, tried to apply stakeholder's theory to irregular warfare . Concepts similar to modern stakeholder theory can be traced back to longstanding philosophical views about the nature of civil society itself and the relations between individuals. In Miles v Sydney Meat-Preserving Co Ltd (1912), which saw
5700-681: Was developed within the disciplines of economics, ethics, law, management, marketing, supply chain management and general business. RBV focuses attention on an organisation's internal resources as a means of organising processes and obtaining a competitive advantage. Barney stated that for resources to hold potential as sources of sustainable competitive advantage, they should be valuable, rare, imperfectly imitable and not substitutable (now generally known as VRIN criteria). The resource-based view suggests that organisations must develop unique, firm-specific core competencies that will allow them to outperform competitors by doing things differently. Although
5776-588: Was evident from the 1930s, noting that Barney was heavily influenced by Wernerfelt's earlier work which introduced the idea of resource position barriers being roughly analogous to entry barriers in the positioning school. Other scholars suggest that the resource-based view represents a new paradigm, albeit with roots in "Ricardian and Penrosian economic theories according to which firms can earn sustainable supranormal returns if, and only if, they have superior resources and those resources are protected by some form of isolating mechanism precluding their diffusion throughout
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